Rex offered $80 million gov package

Embattled Rex Airlines has been offered an $80 million lifeline from the Albanese Government, as it seeks to extend its voluntary administration period.

The Albanese Government has offered embattled Rex Airlines $80 million to keep regional flights running, after the airline entered into voluntary administration in July.

Federal Infrastructure Minister Catherine King and Minister for Employment and Workplace Relations Murray Watt announced on Tuesday morning the funding would support Rex in offering critical services to regional communities during the administration period, with Rex’s administrators intending to apply to the Federal Court of Australia to extend the period to June 30 next year.

The proceeds of the recent sale of Pel-Air Aviation Pty Limited to Helicorp Pty Ltd, part of Toll Aviation, during the administration process will be used to repay secured creditors.

In addition, the Government has agreed to offer former Rex employees early access to entitlements under the Fair Entitlements Guarantee scheme.

“This will ensure that extending the Voluntary Administration period does not delay the ability of these employees to access their entitlements,” Ms King and Mr Watt said.

“The Government will also continue to guarantee ticket sales made throughout the Voluntary Administration to 30 June 2025, should the Federal Court agree to the extension application. The guarantee has been effective so far, and has yet to be used with flight bookings holding up well.”

The administration process is being undertaken by Ernst & Young, with Samuel Freeman of EY saying the funding would help secure Rex’s commercial future.

“The extension we are requesting will help us to build a strong network for regional Australia, enabling us to continue to operate the regional network while undertaking a business improvement plan to reposition the business for sale,” Mr Freeman said.

“We’re planning to increase the size of the operational fleet, while providing greater clarity for the Rex team and investing in strategic growth initiatives.”